CAIRNS, Oct 3 - In an eleventh-hour plea, Jean Illingworth admitted defrauding the state and Commonwealth by inflating student numbers to get extra funding for Djarragun College, near Cairns, between 2010 and 2011.
It was claimed during her committal hearing earlier this year that she enrolled children who never attended classes, including teenagers who were in prison or employed, to keep the school running.
It has never been suggested she kept any of the money herself.
Her shock guilty plea on fraud and obtaining property by deception charges came moments before her long-awaited five-week trial was due to begin in the Cairns District Court.
Illingworth, who had repeatedly claimed she was innocent, will be sentenced in the same court on Friday.
However, it's unlikely she'll spend more time behind bars after serving nearly a year in jail for pre-sentence custody before being released earlier this year.
Illingworth was repeatedly refused bail over claims she tried to pervert the course of justice and breached her bail conditions by contacting Crown witnesses.
Her Barrister Ken Fleming told reporters in Cairns that his 67-year-old client was relieved the court case was over.
"It has taken an enormous toll on her, but that's as far as I can go," he said, adding that he wouldn't comment on her plea.
"She's spent a year in prison."
Illingworth faced a string of other charges, however, all but two were dropped as part of an arrangement with the prosecution.
The amount she was accused of defrauding was also reduced from $8.9 million to $3.4 million under the deal.
Illingworth, who worked at the college for about a decade, was named the Queensland Senior Australian of the Year in 2009 for her work in transforming the once dysfunctional college into a much admired model of success.
The school has since been taken over by Noel Pearson's Cape York Partnerships organisation and both levels of government have since forgiven the debt for the sake of the students.
Illingworth was stood down as principal after police investigations began in 2011, and she was formally charged last year.
Pearson once described her as a true social entrepreneur.